Commercial Real Estate Today: David Reina, of Morris, Manning & Martin On 5 Things You Need to Create a Highly Successful Career in the Commercial Real Estate Industry Today
An interview with Aron Weiner
Never think you have learned enough. The industry is constantly changing, so what you thought you knew last week might not be that helpful this week.
The commercial real estate industry is a dynamic and challenging landscape that offers enormous potential for success. However, it requires a unique blend of skills, knowledge, and aptitude to truly excel. How does one establish themselves in such a competitive field? What does it take to consistently rise to the top in commercial real estate? How does one rise above the headwinds that are challenging the commercial real estate industry today? In this interview series, we are talking to commercial real estate professionals, brokers, investors, leaders of Real Estate Firms and Real Estate Investment Trusts (REITs), as well as anyone who’s found significant success in this industry. As part of this series, we had the pleasure of interviewing David Reina.
David Reina is a partner in Morris, Manning & Martin, LLP’s real estate practice in Washington, D.C. He has extensive experience in a wide range of real estate transactions, including acquisitions and dispositions, joint ventures, development projects, acquisition and construction financings, leases, and real estate fund formations. David represents various owners, operators, investors, developers, universities, landlords, tenants and managers in a broad range of transactional work for multifamily, build-for-rent, hospitality, office, industrial, university and mixed-use projects throughout North America.
Thank you so much for joining us in this interview series! Before we dive in, our readers would like to learn a bit about your origin story. Can you share with us a bit about your childhood and how you grew up?
I am a native New Yorker, Brooklyn-born and raised. I stayed in the city for college, earning a Bachelor of Science in Civil Engineering and a Bachelor of Arts in Literature from Columbia University. My first time living outside the New York area was when I went to law school at the University of Pennsylvania, but I found myself right back in New York after that. After practicing in the city for several years, my wife, pregnant with our first child, and I decided we needed a change and moved to Washington, D.C. My parents, both of whom have spent their entire lives in the New York area, suspect I’m a Southerner now.
Can you share with us the ‘backstory’ of how you got into the real estate business?
I suppose my entry into the real estate business stems from my engineering degree. I was working at a structural engineering firm in New York after graduating from college, doing structural design for projects like the MoMA expansion in Midtown Manhattan, the National Museum of the Native American Indian in Washington D.C., and a private art museum in Potomac, Maryland. I was working with some great architects and builders — I really enjoyed what I was doing. I’ve explored some of those buildings with my kids in the last few years — it’s exciting for me, less so for them.
However, while I loved the work I was doing as an engineer, it was tough getting by in NYC. So, I set out to find something different that would keep me connected to the real estate world. I’d always had an interest in the law, and real estate law seemed like a great way to marry this new job with my lifelong interest. Especially in New York, where I first practiced, you lived among all the great projects that you worked on. I remember spending the better part of a year working with the Port Authority on plans to bring a new rail tunnel under the Hudson River and into Midtown. Ultimately, the project was canceled for funding concerns, but it was exciting to be a part of something that would have been so transformative for my city.
To some extent I overestimated the usefulness of a civil engineering degree in terms of my ability to practice transactional real estate law — I’ve never been asked as a lawyer to make sure that an I-beam was properly sized. But knowing how a construction project actually gets built, and having a familiarity with the language that is used by the various parties involved in the development of a project, makes me a better lawyer.
Can you tell us about your company and what makes it stand out?
I came to Morris, Manning & Martin about eight years ago from a large international law firm whose real estate practice was focused primarily on corporate real estate work — mergers and acquisitions in the real estate space and REIT work. I worked with some great lawyers on some exciting deals there, but at some point, it became obvious that the real estate work was always going to be secondary to the corporate work.
What makes Morris Manning such a great fit for me is that we’re really focused on the clients that do the real estate work: buying and selling, financing, raising equity, development, management, leasing, etc. We do this work very well, across every asset class and with companies at all different stages and sizes. We’re Chambers ranked in real estate generally, and specifically in leisure and hospitality. We have a great track record of working with young, small companies that have matured into big names in the marketplace, and we’ve grown right along with them.
Can you tell our readers about the most exciting new projects you are working on now?
Interest rates have really put a damper on exciting new projects, but I currently have two clients who are looking at separate large portfolio deals of distressed assets in the multifamily space. If they move forward, I’m sure the negotiations will be difficult — portfolio deals always lose some of their luster when you start digging into the assets and separating the losers from the winners — but it would be great to work on a deal with some heft to it again. These deals also include a few development projects with affordable housing components, and it would be great to be a part of bringing those units to market for the people who need them.
I’m oddly excited — maybe optimistic is a better word — to see what the next six months bring in terms of new types of deals. Though COVID was obviously very bad for the real estate industry, it created some unexpected opportunities. I spent a good part of 2020 and 2021 helping clients acquire extended-stay hotels and convert them into affordable and workforce housing. It wasn’t glamorous, but the double whammy of COVID’s detrimental impact on the hospitality sector and the surging demand for affordable housing really allowed these deals to work. That’s one of the great things about the real estate industry — it adapts quickly. So, I’m excited to see what new types of deals come from this brave new world of decades-high interest rates.
As with any career path, the commercial real estate industry comes with its own set of challenges. Could you elaborate on some of the significant challenges you faced in your career and how you managed to overcome them?
For me, the most challenging time in my career was early on, learning how to balance my personal and professional lives, in particular putting in the time needed to create a name for myself in the legal real estate profession while also trying to raise kids and be a decent husband. It’s unfortunate that we expect people to start families and careers at more or less the same time — like could we throw in some other major life thing for the late 20s/early 30s to make things really interesting? In any event, with practice and an incredibly capable and supportive wife, I found a balance, and I think I’m an all-around better person for it. I also learned how much can actually be squeezed out of a day, and it’s pretty cool.
Ok, let’s now move to the main part of our interview about commercial real estate. What are the 3 things that most excite you about the industry now? Why?
Well, let me share my top two. First, commercial real estate continues to be the leading edge of urban development and revitalization. Whole communities have been constructed over the past ten years in urban areas that had been vacant or underutilized for decades. A prime example would be Hudson Yards in NYC. In DC, we’ve seen developments like this next to Nationals Park, in the NoMA neighborhood, and along the waterfront. I was lucky enough to work on a similar project, Morrison Yards, in Charleston, SC. These are massive mixed-use projects that marry residential, retail, leisure and office use in a cohesive architectural plan. It’s just really exciting to be a part of something that big and visionary.
Second, as I mentioned earlier, I’ve really come to appreciate the real estate industry’s ability to adapt — it’s just very resilient. I already gave the example of how some multifamily developers pivoted to conversion projects when COVID hit, but a few years earlier, when there was a glut of luxury multifamily units coming online in the DC area, some really entrepreneurial folks created a pop-up hotel business of renting those units out to guests on a nightly basis — like hotel rooms — until long-term renters were found. The commercial real estate world is full of people like that.
What are the 3 things that concern you about it? Why? What should be done to address and alleviate those concerns?
First is the cost of housing, particularly in and around urban areas. There needs to be enough money left over after paying rent to live your life and save for retirement, and that’s just not possible for a lot of people anymore. I have no idea how to fix the problem, but the situation has gotten so bad that at this point I guess I’m in favor of anything that might help: affordable housing requirements, government subsidies, more permissive zoning laws, whatever it takes to make a dent in the problem.
Second is the hollowing out of central business districts in the wake of COVID. Remote work is nice for stretching a weekend into a long weekend, but I remain a firm believer that being in an actual physical office with your co-workers, in a neighborhood filled with other offices and people working in them, is still the best way to conduct business. To break the doom loop, the private sector needs to recommit itself to in-office work, and city governments need to bring service levels for business districts back up to what they were before the pandemic.
Third, I worry that we do too many activities online that we used to do in person. Retail shopping is the obvious best example. But even things like visiting a doctor’s office or going to the gas station are being replaced by telehealth appointments and at-home EV charging stations. In my opinion, the best part of being in a public or shared space is that you experience unexpected things — it really opens your mind.
I am hearing the phrase “Stay alive until 2025” a lot. What is your plan to survive in the current market?
My plan is to remain laser-focused on providing top-notch client service and helping clients find creative solutions for getting deals done in the transaction-limited environment we find ourselves in. It’s also helpful to accept that it can’t always be the busiest year you’ve ever had — enjoy the downtime while it lasts.
For a young person who would like to eventually make a career in commercial real estate, which skills and subjects do they need to learn?
Take a basic real estate transactions class, a basic accounting class, a basic tax class, and a basic land use and development class. Give yourself just enough familiarity with these topics so you can see how they are interconnected. If nothing else, these classes will introduce you to the hundreds of abbreviations and acronyms that dominate our industry.
I would also recommend taking the time to attend in-person events and talking to as many people in the real estate industry as possible about the deals they’re working on. Getting a broad understanding of the real estate world, particularly when you are young, will absolutely set you apart from those who don’t take the time to really understand the business.
When evaluating deals or opportunities in real estate, what are the most important factors you look for and why? Can you provide some examples?
Any time I get a phone call from a client about a new deal, I ask myself, “Does this sound so good because it’s actually too good to be true? What’s the issue that’s not being discussed?” There are a lot of very smart, very diligent people in the real estate industry so it’s pretty rare to find those one-offs that everyone else has missed. Look at everything skeptically and have a lot of irons in the fire.
Can you share a story with us about the hardest deal you made, that ended successfully for you?
I was on a team in 2015 that represented one of the U.S.’s largest real estate companies in the sale of almost all of its assets to two competitors. At that time, I think this was the largest real estate deal that had ever been done. We spent a week in New York holed up in conference rooms negotiating the deal. I pulled three all-nighters that week, and that was probably more sleep than most people involved in that deal got — it was just an absolute grind. The deal was on, the deal was off, there were ten-figure swings in the business terms — at one point, about a dozen people were rifling through a waste bin with thousands of pages of paper in it, looking for the hand-written notes of one of the principals — it was the epitome of a pressure cooker situation. But somehow it got done. I remember sitting in a conference room with my colleagues and a group of executives watching the deal announced on CNBC on Friday morning, and seeing the happiness in the room as the champagne was passed around. That was by far the most satisfying moment in my career — to have been a part of something that hard and that unlikely, and to have helped make it happen. It felt like building a building.
Based on your personal experience and success, can you please share “Five Things You Need To Create A Highly Successful Career In The Commercial Real Estate Industry”?
- Be invested in your career. Dedicate one evening a month to an industry or networking event. On your morning jog, go past that new development project everyone is talking about. See where the new construction is. You’re only going to get out of it what you put into it.
- Be nice to everyone. The head of HR at my first job out of college sat within earshot of reception so she could hear how potential hires talked to the receptionist. Someone is always listening. And being nice isn’t hard, it just takes a little self-control.
- Never think you have learned enough. The industry is constantly changing, so what you thought you knew last week might not be that helpful this week.
- Maintain your old connections while continuing to make new ones. Especially when talking to and mentoring young people in the industry, as those people could become future clients. Even if they don’t become clients, be a mentor and resource to up-and-comers in the industry.
- Try to put your disappointments and losses in perspective. Everyone hits a few rough patches over the course of a career. Acknowledge them, learn from them, place them solidly in the past, and keep moving forward. If nothing else, the simple passage of time blunts bad memories.
Do you have three things you would advise a new real estate professional to avoid?
Don’t hyper-specialize right out of the gate. The real estate industry is huge, and what you need to understand to be a meaningful part of it is actually quite broad. For example, if your goal is to be a tenant-leasing broker, you still need to understand the basics of how lending works. Try to keep a broad perspective when you are young.
Secondly, don’t go at it alone. Surround yourself with people who know more than you and want to teach you.
And, at the risk of sounding repetitive — be nice. It’s such a simple concept, but people want to work with and work for nice people. And employees and clients will often follow nice people to their next job.
What advice would you give to another real estate professional about improving the work culture, building team morale, and helping each employee thrive?
I would emphasize the importance of mentorship — formal and informal. Senior leaders in an organization should recognize it’s their obligation to help younger professionals learn and succeed. Let them sit in on phone calls they won’t understand (it will still help them learn the lingo), give them assignments they can’t really complete on their own (and then sit down with them and complete the assignment together), and ask them how their weekend was (because odds are they are younger and do more cool stuff than you). And if nothing else, you want the next generation of talent to be poised and ready to take the firm to the next level long after you’re gone.
What is your favorite “Life Lesson Quote”? Can you share a story of how that had relevance to your own life?
“How do you make God laugh? Tell him your plans.” Every time in my life I thought I had something major figured out, it changed — almost always for the better. The ability to adapt is far more powerful than our meager ability to control.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger.
This is such a nerd answer, but show up prepared. Ninety percent of being the smartest person in the room is being the most prepared person in the room. If you didn’t bother to read the agreement before getting on a phone call to discuss the agreement, you are short-shrifting yourself and wasting everyone else’s time.
How can our readers further follow your work online?
Feel free to reach me at dreina@mmmlaw.com or on LinkedIn at https://www.linkedin.com/in/david-c-reina-784b925/.
This was very inspiring. Thank you so much for joining us!
